Lately, I’ve found quite a bit of online content that pertains to getting business credit with just your EIN, and I’ve seen some pretty good information. But, I haven’t found a thorough answer to the core question, which is, “How can you get business credit using your EIN and not your SSN?”
First of all, if you’re not up-to-date with the lingo, what you’re essentially looking for here is business credit without a “personal guarantee.” Luckily, there are lenders that do not require a personal guarantee for business financing, but most of the good options are not common nor easy to find. So, let’s explore everything you need to know.
Here’s what’s in store:
- In Business Credit, What is a Personal Guarantee?
- What if You Aren’t Eligible for an SSN?
- What if You Have Bad Personal Credit?
- How Can You Use Your EIN Instead of Your SSN to Get Business Credit and Loans?
- Lenders That Offer Financing With No Personal Guarantee
- Final Thoughts
In Business Credit, What is a Personal Guarantee?
When a business takes out an unsecured loan or line of credit, most lenders want assurance that the funds will be paid back. A personal guarantee is a promise that, should the business fail to repay, the individual will be responsible for the debt. This responsibility typically falls on a company executive or business owner.
With a business loan or line of credit for which you are the personal guarantor, the lender has a legal right to your individual assets if your business does not repay the debt as agreed. In order to legally collect the funds in this case, the lender needs your social security number (SSN).
Your SSN often serves a second purpose, which is to see if you have shown responsible credit behavior with your personal finances. Really, lenders just want to make sure you are responsible even when your business is obviously financially healthy.
|💡 Does Your EIN Have a Credit Score? Your business has it’s own public credit score, separate from your private personal FICO score. To learn more about the oldest and most-used business credit bureau, see Everything You Need to Know About a DUNS Number & Why Should You Care.
What if You Aren’t Eligible for an SSN?
If the reason you want a business credit card is that you don’t have a social security number — perhaps you’re a nonresident of the United States doing business here — you can take another route to bypass the SSN section of a credit card or loan application. In this case, you need to file for an Individual Taxpayer Identification Number (ITIN) through the IRS.
Several credit lenders allow you to apply for funding using an ITIN instead of an SSN. I recently did a write-up on one of them and you can find more about it (and competitors) here: Chase Ink Business Preferred Credit Card: A Deep Dive.
To apply for an ITIN, use IRS form W-7. Consult with a CPA licensed in the state where you do business to find out more as it applies to your situation.
What if You Have Bad Personal Credit?
Another reason you might want to apply for business credit using your EIN and not your SSN is that you have a low FICO score. If you’re in this boat, there are steps you can take to remedy the predicament. These steps will vary based on your situation.
In all cases, the first step will be to learn about the common errors often reported by consumer credit bureaus and leverage them to your advantage. For example, you might learn how to best deal with vehicle repossessions and defaulted loans or what can be disputed in a credit file and how to do so.
How Can You Use Your EIN Instead of Your SSN to Get Business Credit and Loans?
If you want to get a line of credit for your EIN and withhold your SSN, as you probably guessed, you need to find a lender that does not require a personal guarantee. Then, you will need to meet the credit and income requirements of that lender. Finally, you’ll need to apply.
Lenders That Offer Financing With No Personal Guarantee
As I’ve already said, lenders that do not require a personal guarantee are uncommon. But, they’re not impossible to find. Here’s a list of a some lenders who may not require an SSN or an ITIN to apply for a line of credit or a loan.
Business Credit Cards
These business credit cards are fairly easy for companies of all sizes, including freelancers and individual contractors, to qualify for and require no personal guarantee.
- Sam’s Club Business Credit Card
- Office Depot OfficeMax Business Credit Account
- Shell Small Business Gas Card
- SuperAmerica Fleet Credit Card
Corporate Credit Cards
Rather than base your credit limit on your FICO score, you may be able to meet revenue requirements for one of these corporate cards with no personal guarantee. You may need an actual S or C corporation to qualify (in some cases, an LLC might suffice).
- Brex Rewards Card
- Stripe Corporate Card – see our full write-up here.
- ScaleFactor Visa Charge Card
- Bremer Bank Business Card
- American Express Corporate Cards
- Capital One Corporate Cards
- Citibank Corporate Cards
- JP Morgan Chase Corporate Cards
- Wells Fargo Corporate Cards
While you may be required to share your SSN during the initial application process to ensure that you meet minimum credit requirements, these lenders have funding options that require no personal guarantee.
- StreetShares – requires no personal guarantee for government contractors and subcontractors to Fortune 500 companies.
Alternative Financing [Proceed With Caution]
First, when you don’t qualify for a business loan or line of credit, you can try for a personal loan or credit card instead. In fact, many companies are funded with personal capital. But, personal credit is typically more limited as far as funding amount and rewards than business credit.
Next, if you have a friend or family member willing to extend a loan to your business, you may be able to request a private contract without using your SSN and with no personal guarantee. Most people avoid this to protect perfectly healthy relationships rather than muddy them with potentially disastrous business affairs.
Then, depending on your type of and stage in business, you may also find VC or Angel investors willing to extend funding, which typically requires formal pitching and a detailed plan that outlines how you will use the money to increase company profits. In nearly all cases, investors also require a certain level of control over business management and a share of the revenue. So, if you want to maintain your operations as is (and keep your profits for yourself), this isn’t a great option.
Finally — and I hesitate here — it may be worth mentioning that other options include working capital financing or merchant cash advances. In rudimentary terms, you can take out an equity loan on accounts payable. However, I do not recommend these channels. Repayment on these types of loans is overly-expensive akin to personal payday loans.
Business lenders that provide practical funding solutions you can apply for using only an EIN are unicorns in the financial universe. But, if you’ve made it here, you should know everything you need to find one. If you’ve tried, but still can’t seem to qualify for financing, there’s plenty you can do to transform your situation.
And, if you know of other lenders who require no personal guarantee, I’d love to hear about them. For now, I recommend you learn how to build business credit so that you can access high-limit loans and credit cards with the best possible rates. If you want to learn how to obtain $100K in business credit in 30 days, I invite you to join Business Credit Workshop today.